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A licence does not remove the need to be licensed at all

A worked RES examination question on developer licensing, from our Paper 2 bank — with the rule it turns on, and why each of the four options is right or wrong.

Paper 2Lesson 4Developer licensingFree — no sign-up

The question

Skyline Developments holds a Sale Licence for its uncompleted project, and its marketing agent checks which conditions attach to how and when the developer may sell the units.

Consider the following statements.

  1. (i) A Sale Licence permits the developer to sell units after Building Plan Approval is obtained.
  2. (ii) A Sale Licence removes the developer's need to hold any licence at all.
  3. (iii) The developer's sale of units remains subject to the conditions attached to its licence.
  4. (iv) A No-Sale Licence, by contrast, bars selling until TOP.
  1. A. (i) and (iii) only
  2. B. (i), (ii), (iii) and (iv)
  3. C. (i), (iii) and (iv) only
  4. D. (ii) and (iii) only

The answer, and why

Answer: C

The rule. A Sale Licence permits selling after Building Plan Approval, but the developer's sale of units remains subject to the conditions attached to its licence; a No-Sale Licence, by contrast, bars selling until TOP. A licence does not remove the need to be licensed at all.

Why C is correct. (i) selling after Building Plan Approval, (iii) the licence conditions and (iv) the No-Sale Licence bar are correct. (ii) is false — a Sale Licence does not remove the need to hold a licence.

The other options.

  • B adds the false (ii), dispensing with the licence.
  • A drops (iv), the No-Sale Licence bar.
  • D drops (i), selling after Building Plan Approval.

Exam note. A Sale Licence lets you sell after Building Plan Approval — under its conditions; a No-Sale Licence bars selling until TOP.

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